On the role of inequalities and public education expenditures in human capital investment: a theoretical approach

Mohamed Ben Mimoun ()

Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1)

Abstract: We show in this paper that greater inequality in the distribution of wealth implies lower investment in higher education levels and lower aggregate income. Liquidity constraints and indivisibility in human capital investment result in the long-run in multiple equilibria with poverty traps. Although the heterogeneity in individual abilities allows economic mobility is not full : poor individuals with low abilities remain poor forever. The effect of the fiscal redistribution on the level of human capital investment is ambiguous unless for higher levels of income inequality where this effect is positive. Education funding policies however, are shown to be more efficient in enhancing human capital investment and rising interclass and intergenerational economic mobility.

Keywords: Wealth inequality; human capital; economic mobility; fiscal redistribution; public education expenditures. (search for similar items in EconPapers)
JEL-codes: H52 I21 I22 I28 O15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-pbe
Date: 2004-11
View list of references

Downloads: (external link)
ftp://mse.univ-paris1.fr/pub/mse/cahiers2004/Bla04094.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:mse:wpsorb:bla04094

Access Statistics for this paper

More papers in Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1)
Contact information at EDIRC.
Series data maintained by Jacqueline Pradel ().